For both landlords and tenants, rent increases can be a source of confusion and disagreement. Rising mortgage costs, inflation, and increasing property expenses have led many landlords to review rental income, while tenants are understandably concerned about affordability and security.
One of the most common questions landlords and tenants ask is whether rent can be increased during a fixed-term tenancy. The answer depends on the tenancy agreement, the type of tenancy in place, and whether both parties agree to the increase.
In England and Wales, landlords cannot simply increase rent whenever they choose. There are specific legal rules that govern when rent increases are permitted and how they must be implemented.
Understanding these rules can help landlords avoid disputes and ensure they remain compliant with their legal obligations.
What Is a Fixed-Term Tenancy?
A fixed-term tenancy is a tenancy agreement that runs for a specified period, commonly six months or twelve months.
During the fixed term, both landlord and tenant are generally bound by the terms of the agreement. The tenant agrees to pay rent and comply with the tenancy conditions, while the landlord agrees to provide occupation of the property under the agreed terms.
Many landlords assume they can increase rent during this period if their own costs rise. However, this is not usually the case.
In most situations, rent can only be increased during a fixed-term tenancy if:
- The tenancy agreement contains a valid rent review clause
- The tenant agrees to the increase
- A new tenancy agreement is entered into
Without one of these circumstances, the rent usually remains fixed until the end of the agreed term.
A rent review clause should clearly explain how and when rent may be increased. Ambiguous clauses can be challenged and may not be enforceable.
Landlords should avoid relying on informal conversations or verbal agreements. Any rent increase should be documented properly to avoid misunderstandings.
When Can Rent Be Increased During the Fixed Term?
If the tenancy agreement contains a rent review clause, the landlord may be entitled to increase the rent in accordance with that clause.
The wording is important. A valid clause should clearly set out:
- When the increase can occur
- How the increase will be calculated
- Any notice requirements
- Any limits on increases
The increase must be applied fairly and consistently with the agreement.
Alternatively, a landlord and tenant may mutually agree to increase the rent during the fixed term. This agreement should ideally be recorded in writing.
Some landlords attempt to impose rent increases unilaterally during the fixed term. This can lead to disputes and may amount to a breach of the tenancy agreement.
The position differs from periodic tenancies. Once a tenancy becomes periodic, landlords may have additional mechanisms available to increase rent, including the statutory procedure under Section 13 of the Housing Act 1988 for certain tenancies.
However, Section 13 notices generally cannot be used to increase rent during an existing fixed term.
Landlords should also be aware that attempting to pressure tenants into accepting rent increases could damage the landlord-tenant relationship and potentially create legal complications.
What Happens If a Tenant Refuses a Rent Increase?
If a landlord proposes a rent increase during the fixed term and there is no contractual basis for doing so, the tenant is entitled to refuse.
Where a valid rent review clause exists, the position may be different, depending on the wording of the agreement.
Disputes often arise where tenants believe the increase is unreasonable or where the tenancy agreement is unclear.
For landlords, the safest approach is to ensure tenancy agreements are properly drafted from the outset. A clear rent review mechanism can reduce uncertainty and provide a lawful route for future increases.
Landlords should also remember that retaining a reliable tenant is often more financially beneficial than pursuing aggressive rent increases that may result in vacancy periods or disputes.
Professional legal advice can be particularly valuable where landlords own multiple properties, use bespoke tenancy agreements, or face tenant challenges regarding proposed increases.
Protecting Your Position as a Landlord
Landlord and tenant law continues to evolve, and compliance is increasingly important for property owners.
Before seeking to increase rent during a fixed-term tenancy, landlords should carefully review the tenancy agreement and ensure any proposed action complies with the law in England and Wales.
A poorly handled rent increase can result in disputes, delays, and potential legal costs.
At Penerley Solicitors, we advise landlords across England and Wales on tenancy agreements, rent disputes, possession proceedings, and wider landlord and tenant matters.
If you are considering increasing rent during a tenancy or need advice regarding your legal rights as a landlord, contact Penerley Solicitors today for clear, practical legal guidance tailored to your circumstances.
